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Division of Developmental Disabilities

Table Of Contents

Division Policy Manuals

Operations Policy Manual

Medical Policy Manual

Eligibility Policy Manual

Behavior Supports Policy Manual

Provider Policy Manual

AdSS Operations Policy Manual

AdSS Medical Policy Manual

Table Of Contents

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Operations Manual Table of Contents

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Table of Contents Page 1 of 6

Chapter 100 Administration

101 Marketing

103 Fraud, Waste and Abuse

104 Continuity of Operations/Emergency Preparedness

108 Security Rule Compliance

109 Institution for Mental Disease 15 Day Limit

110 Mental Health Parity

Chapter 200 Claims

203 Claims Processing

205 Ground Ambulance Transportation Reimbursement Requirements for Non-contracted Providers

Chapter 300 Financial

302 Prior Period Coverage Reconciliation: Administrative Services Subcontractors

305 Performance Bond and Equity Per Member Requirements

314 Auto-Assignment Algorithm

317 Change in Organizational Structure

320 Health Insurer Provider Fee

321 Payment Reform – E-Prescribing

325 Access to Professional Services Initiative and Reconciliation

Chapter 400 Operations

404 Contractor Website and Member Information

406 Member Handbook and Provider Directory

407 Workforce Development

412 Claims Recoupment

414 Requirements for Service Authorization Decisions and Notices of Adverse Benefit

415 Provider Network Development and Management Plan: Periodic Network Reporting Requirements

416 Provider Network Information

Division of Developmental Disabilities Operations Manual Table of Contents

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417 Appointment Availability, Monitoring and Reporting

418 Provider and Affiliate Advances, Equity Distributions, Loans & Investments

424 Verification of Receipt of Paid Services

426 Children’s Rehabilitation Services Application, Designation and Coverage

431 Copayment

435 Telephone Performance Standards and Reporting

436 Network Standards

438 Administrative Services Subcontracts

439 Materials Changes: Provider Network and Business Operations

446 Grievances and Investigations Concerning Persons with Serious Mental Illness

449 Behavioral Health Services for Children in Department of Child Safety and Adopted Children

Chapter 1000 Members and Families

1001-A Basic Human and Disability Related Rights

1001-B Responsibilities of Individuals Applying for and/or Receiving Supports and Services

1001-C Rights of Persons with Developmental Disabilities Living in residential Settings

1001-D Program Values and Guiding Principles

1002 Voter Registration

1003 District Independent Oversight Committees

1004-A Informed Consent

1004-B Consent to Medical Treatment of Minors, Incapacitated Minors, and Incapacitated Adults

1005-A Guardianship and Conservatorship or Surrogate Parent

1005-C Authorized Representative for ALTCS Benefits

1005-D Representative Payee

1006 Healthcare Directives/Advance Directives (AHCD)


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Chapter 2000 Support Coordination

2001 Planning Team Members Roles and Responsibilities

2002 Planning Meetings

2003 Planning Documents

2004 Service Authorizations

2005 Referral and Placement in Services

2006 Arizona Long Term Care Non-Users

2007 Case Closure

Chapter 3000 Network

3001 Family Members as Paid Providers

3002 Home and Community Based Service Delivery

3003 Selection of Providers

3004 Reserved

3005 Notification of Network Changes

3006 Short term Emergency Situations (residential and Day Programs)

3007 Service Provider Information, Authority, and Notification

Chapter 4000 Business Operations Third Party Liability

4001 Third Party Liability

4002 Client Billing

4003 Administrative Review/Appeal and Hearing Rights

4004 Management of Member Funds

4004 Overview

4004-A Definitions

4004-B Member Funds System

4004-C Policy

4004-D Responsibilities

4004-E Safeguarding Member Funds

4004-F Member Funds Security


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4004-G Disbursing Member Funds

4004-H Member Funds – Provider Responsibilities

4004-I Ledgers Maintained by Providers

4004-J Bank of Reconciliation

4004-K Use of Member Funds

4004-L Reviewing Member’s Accounts

4004-M Changes in a Member’s Status

4004-N Investing Member Funds

4004-O Termination of a Member’s Account or Change in Representative Payee

Chapter 5000 Reserved

Chapter 6000 Administrative Operations Records Retention

6001-A Confidentiality

6001-B Release of Information

6001-C Access to Personally Identifiable Information

6001-D Lawful Disclosure of Confidential Information

6001-E Violations and Penalties

6001-F Case Records

6001-G Documentation Requirements

6001-H Records Storage and Security

6001-I Management and Maintenance of Records Related to the Medical Line of Business

6002 Incident Management

6002-A Definitions of Incidents and Serious Incidents

6002-B Incident Management Systems Definitions

6002-C Reporting Requirements

6002-D Members At-Risk if Missing

6002-E Incident Reports

6002-F Fact Finding

6002-G Abuse and Neglect


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6002-H Referral to other Investigative Agencies

6002-I Incident Closure and Corrective Actions

6002-J Trending for Quality Improvement

6002-K Information Sharing

6002-L Mortality Review Audits

6002-M Mortality Review Process

6002-N Fraud and False Claims

6002-O Health Care Acquired Conditions

6003 Grievance and Appeals

6003-A Definitions

6003-B Informal Resolution/Grievance Process Non-Arizona long term Care System

6003-C Appeal Process for Members Who Receive State Funded Services

6003-D Notice of Intended Action (State Only)

6003-E Administrative Review Process (State Only)

6003-F Fair Hearings and Appeals

6003-G State Only Arizona Long Term Care System Grievance Process

6003-H Arizona Long Term Care System Notice of Adverse Benefit Determination

6003-I Arizona Long Term Care Services Appeal Process

6003-J Arizona Long Term Care System Fair Hearing Process

6003-K Claim Disputes

6003-L Attorneys at Planning Meetings

6003-M Conducting All Meetings

6004 Program Oversight

6004-A Quality Management

6004-B Internal Oversight

6004-C External Oversight

6004-D Division Oversight Findings


Operations Manual Table of Contents

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6004-E Operational Reviews

6004-F Compliance Program

Division of Developmental Disabilities Operations Policy Manual


101 MARKETING

REVISION DATE: 4 /29/2020 EFFECTIVE DATE: October 1, 2019 REFERENCES: D DD Operations Policy 404, AdSS Operations Policy 101 Marketing is defined as any communication from the Division of Developmental Disabilities (DDD) to a member not enrolled with the Division that can reasonably be interpreted as intended to influence the member to enroll with the Division, or to not enroll or disenroll with another Contractor’s Medicaid product as described in 42 CFR 4 38.104. Marketing does not include communication to any Medicaid member about a Qualified Health Plan, as defined in 45 CFR 155.20. For the purposes of this Policy, Marketing contrasts with Member Information found in DDD Policy 404, which addresses r equirements and restrictions for the Division related to member and potential member information and a ctivities. The Division is the sole contractor with AHCCCS for providing Medicaid services to individuals with Developmental Disabilities. As the sole contractor, the Division does not engage in Marketing as defined by AHCCCS. See Division Operations Policy 404 – Member Information Material and AdSS Operations Policy 101 – Marketing for more i nformation.

101 Marketing Page 1 of 1


Operations Manual Chapter 100

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103 Fraud, Waste, and Abuse Page 1 of 7

103 FRAUD, WASTE, AND ABUSE

EFFECTIVE DATE: October 1, 2019 REFERENCES: A.R.S. §36-2901, A.R.S. §36-2918, A.R.S. §36-2957, A.R.S. §36-2903.01(L); A.A.C. R9-22-702; 42 CFR 455.101, 42 CFR 438.608, 42 CFR Part 438, Subpart H, 42 CFR 455, 42 CFR 455, Subpart A, 42 CFR 455, Subpart B, 42 CFR 455.2, 42 CFR 455.23, 42 CFR 455.101, 42 CFR 455.436; ACOM Policy 103, Attachment A, Attestation of: Disclosure of Ownership and Control and Disclosure of Information of Persons Convicted of a Crime, ACOM Policy 103, Attachment B, ACOM Policy 424; DDD Medical Policy 950, Credentialing and Recredentialing Processes; Attachment F3, Contractor Chart of Deliverables State Medicaid Director Letters 08-003 and 09-001; Section 6032 of the Deficit Reduction Act.

Purpose

This Policy applies to the Division of Developmental Disabilities (DDD, the Division). The purpose of this Policy is to outline the corporate compliance requirements including the reporting responsibilities for alleged fraud, waste, and abuse involving Division program funds regardless of the source. This Policy also addresses additional responsibilities regarding compliance with broader program integrity, regulatory and programmatic requirements.

Definitions

A. Administrative Services Subcontract - An agreement that delegates any of the requirements of the Contract with AHCCCS, including, but not limited to the following:

1. Claims processing, including pharmacy claims

2. Credentialing, including those for only primary source verification (i.e. Credential Verification Organization)

3. Management Service Agreements

4. Service Level Agreements with the Division

5. DDD acute care subcontractors

Providers are not Administrative Services Subcontractors.

B. Abuse of the Program - Provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost to the Division program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. It also includes beneficiary practices that result in unnecessary cost to the Division Program. 42 CFR 455.2.

C. Agent - Any person who has been delegated the authority to obligate or act on behalf of a Provider. [42 CFR 455.101]

D. Corporate Compliance Officer - The on-site management official designated by the Division to implement, oversee and administer the Division’s compliance program.



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The Corporate Compliance Officer must be available to all of the Division’s employees, and possess the authority to access and provide records, and make independent referrals to the AHCCCS Office of Inspector General (AHCCCS-OIG). 42 CFR 438.608.

E. Credible Allegation of Fraud - A credible allegation of fraud may be an allegation, which has been verified by the State, from any source, including but not limited to the following:

1. Fraud hotline complaints

2. Claims data mining

3. Patterns identified through provider audits, civil false claims cases, and law enforcement investigations

Allegations are considered to be credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts and evidence carefully and acts judiciously on a case-by-case basis. 42 CFR 455.2.

F. Fraud - An intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable State or Federal law, as defined in 42 CFR 455.2.

G. Managing Employee - A general manager, business manager, administrator, director, or other individual who exercises operational or managerial control over, or who directly or indirectly conducts the day-to-day operation of an institution, organization, or agency. [42 CFR 455.101]

H. Provider - Any person or entity that contracts with the Division for the provision of covered services to members according to the provisions A.R.S. §36-2901 or any subcontractor of a provider delivering services pursuant to A.R.S. §36-2901.

I. Waste - Over-utilization or inappropriate utilization of services, misuse of resources, or practices that result in unnecessary costs to the Medicaid Program.

Policy

A. Authority

The AHCCCS Office of Inspector General (AHCCCS-OIG) is the division of AHCCCS that has the authority to conduct preliminary and full investigations relating to fraud, waste, and abuse involving the programs administered by AHCCCS. Pursuant to 42 CFR 455, Subpart A, and an Intergovernmental Agreement with the Arizona Attorney General’s Office, AHCCCS-OIG refers cases of suspected Medicaid fraud to the State Medicaid Fraud Control Unit for appropriate legal action. AHCCCS-OIG also has the authority to make independent referrals to other law enforcement entities.

1. Pursuant to A.R.S. §36-2918, AHCCCS-OIG has the authority to issue subpoena and enforce the attendance of witnesses, administer oaths or affirmations, examine witnesses under oath, and take testimony as the



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Inspector General deems relevant or material to an investigation, examination, or review undertaken by the Office.

2. Pursuant to A.R.S. §§36-2918 and 2957, AHCCCS-OIG has the authority to impose a civil monetary penalty of up to $2,000.00 for each item or service claimed, and/or an assessment of an amount not to exceed twice the amount claimed.

3. AHCCCS-OIG has been designated as a Criminal Justice Agency through the Federal Bureau of Investigations (FBI). This designation authorizes AHCCCS-OIG to access the National Crime Information Center (NCIC) data base as well as the Arizona Criminal Justice Information System. Additionally, OIG is authorized to receive and share restricted criminal justice information with other federal, state and local agencies.

4. If AHCCCS-OIG determines that a credible allegation of fraud exists, AHCCCS-OIG may suspend payments to Providers pursuant to 42 CFR 455.23.

B. Division Responsibilities

The Division must:

1. Have in place internal controls, policies and procedures to prevent, detect, and report fraud, waste, and abuse activities to AHCCCS-OIG.

2. Have a Corporate Compliance Program that complies with the Division’s contract with AHCCCS, and all state and federal laws., including 42 CFR Part 438, Subpart H. The Corporate Compliance Program must include but not be limited to:

a. Program integrity goals and objectives,

b. Descriptions of internal and external controls employed by the Division to ensure compliance with State and Federal law,

c. The Division’s corporate compliance activities, and,

d. The roles and responsibilities of the Division staff as they relate to the Corporate Compliance Program.

The Division may use the sample Corporate Compliance Plan provided as ACOM 103, Attachment B, for guidance on how to present such compliance activities. The Division’s written Corporate Compliance Plan must be submitted to AHCCCS-OIG annually as specified in Contract.

3. The Corporate Compliance Plan must include a program integrity audit/review program designed to identify fraud, waste and/or abuse. The program will ensure that the Division tracks inadequate billing practices and identifies emerging trends in an effort to provide technical assistance to contracted Providers and avoid future occurrences of problematic billing.

4. The Division must provide the external auditing schedule and executive



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summary of all individual Provider audits to AHCCCS-OIG as specified in Contract.

5. Obtain and disclose the information regarding Ownership and Control, and Disclosure of Information on Persons Convicted of Crimes in accordance with 42 CFR Part 455, Subpart B, 42 CFR 455.436, State Medicaid Director Letters 08-003 and 09-001, and the contractual provisions contained in the contract. The Division must also obtain and disclose the same information regarding its Administrative Services Subcontractors. The results of the Disclosure of Ownership and Control and the Disclosure of Information on Persons Convicted of Crimes shall be held by the Division. The Division and its Administrative Services Subcontractors shall disclose to AHCCCS-OIG the identity of any person excluded from participation in federal healthcare programs.

6. Submit annually, Attachment A, Attestation of: Disclosure of Ownership and Control and Disclosure of Information of Persons Convicted of a Crime, as specified in Contract, attesting that the information has been obtained and verified by the Division, or upon request, provide this information to AHCCCS-OIG.

7. Comply with Section 6032 of the Deficit Reduction Act.

8. Ensure all employees, subcontracted Providers and members receive adequate training and ongoing education on the following aspects of the Federal False Claims Act provisions:

a. The administrative remedies for false claims and statements

b. Any State laws relating to civil or criminal penalties for false claims and statements

c. The whistleblower protections under such laws

9. Ensure adequate training addressing fraud, waste, and abuse prevention, recognition and reporting, and encourage employees, contracted Providers, and members to report fraud, waste, and abuse without fear of retaliation.

10. Ensure an internal reporting process that is well defined and made known to all employees.

11. Conduct research and proactively identify changes for program integrity that are relevant to their program, and periodically review and revise the fraud, waste, and abuse policies or guidance from the Division to reflect such changes due to rules, regulations or new initiatives.

12. Regularly attend and participate in AHCCCS-OIG work group meetings.

13. Respond promptly and no later than 30 days to requests for information from OIG.

14. Cooperate with AHCCCS-OIG regarding any allegation of member billing in



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violation of A.R.S. §36-2903.01(L) and A.A.C. R9-22-702.

15. The Division must have a method of verifying with Division members that they received the services billed by Providers to identify potential service/claim fraud. The Division must perform periodic audits through member contact and to report the results of these audits as described in ACOM Policy 424.

16. In addition to the specific requirements stated above, it is required that the Division be in compliance with all State and Federal laws and regulations related to fraud, waste, and abuse even if not directly detailed in this Policy.

C. Reporting Responsibilities

1. Fraud, Waste and Abuse

a. If the Division discovers, or is made aware, that an incident of alleged fraud, waste, or abuse has occurred, the Division shall immediately report the incident to AHCCCS-OIG within ten business days, by completing and submitting the Report Suspected Fraud or Abuse of the Program form available on the AHCCCS-OIG webpage. All pertinent documentation that would assist AHCCCS in its investigation shall be attached to the form,

b. If the Division, Administrative Service Subcontractor, or Provider identifies an incident which warrants self-disclosure, the incident must be reported within ten business days to AHCCCS-OIG by completing and submitting the Provider Self-Disclosure form available on the AHCCCS-OIG webpage. All pertinent documentation that would assist AHCCCS in its investigation shall be attached to the form,

c. Once the Division has referred a case of alleged fraud, waste, or abuse to AHCCCS-OIG, the Division must take no action to recoup or otherwise offset any suspected overpayments,

d. In the event AHCCCS-OIG feels it would be beneficial to seek additional and/or clarifying details regarding a referral from the Division, AHCCCS-OIG may first choose to request preliminary review work from the Division in order to expand the allegation and to obtain further documentation that will support an investigation by AHCCCS-OIG,

e. If AHCCCS-OIG chooses to seek additional and/or clarifying details regarding a referral from the Division, the Division will have 30 business days or more to provide the requested documentation, or provide an update as to the status of completing such request,

f. Once AHCCCS-OIG receives a referral, it will conduct a preliminary investigation to determine if there is sufficient basis to warrant a full investigation,



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g. AHCCCS-OIG will notify the Division when the investigation concludes in a manner that safeguards the integrity and confidentiality of the investigation,

h. If it is determined by AHCCCS-OIG not to be a fraud, waste, or abuse case, AHCCCS-OIG will return the matter to the Division for disposition in accordance with any applicable laws and/or contracts,

i. The Division agrees that AHCCCS has the sole authority to handle and dispose of any matter involving fraud, waste or abuse. The Division assigns to AHCCCS the right to recoup any amounts overpaid to a Provider as a result of fraud, waste or abuse. If the Division receives anything of value that could be construed to represent the repayment of any amount expended due to fraud, waste or abuse, the Division must forward that recovery to AHCCCS-OIG within 30 days of its receipt. The Division relinquishes any and all claims to any monies received by AHCCCS as a result of any program integrity efforts which include, but are not limited to:

i. Civil monetary penalties and/or assessments

ii. Civil settlements and/or judgments

iii. Criminal restitution

j. The Division must also report to AHCCCS, as specified in Contract, , and DDD Medical Policy 950, any credentialing denials including, but not limited to:

i. Those which are the result of licensure issues

ii. Quality of care concerns

iii. Excluded Providers

iv. Alleged fraud, waste, or abuse

D. The Division’s Responsibilities related to Fraud, Waste and Abuse

1. Process all referrals of allegations of suspected member and provider fraud.

2. Oversee, monitor and be the focal point for the Division’s compliance program, with the authority to review all documents and functions as they relate to fraud, waste and abuse prevention, detection and reporting.

3. Maintain and monitor a tracking system of fraud, waste and abuse referrals.

4. Ensure all employees, Subcontractors, Providers, agents and members receive adequate training and information regarding fraud, waste and abuse prevention, identification and reporting. Assure employees, Subcontractors, Providers, agents and members that they can report fraud, waste and abuse without fear of retaliation.



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5. Develop and maintain open channels of communication with AHCCCS OIG, Subcontractors, Providers, agents and members to combat fraud, waste, and abuse at all levels in the System.

6. Develop and maintain open channels of communication with DES OIG in the prevention and detection of fraud, waste, and abuse.

7. Make referrals to AHCCCS OIG to investigate cases of potential member billing in violation of A.R.S. §36-2903.01(L) and A.A.C. R9-22-702.

8. Perform all functions required by Section 6032 of the Deficit Reduction Act, including the auditing of Providers to ensure their compliance.

9. Ensure that the Division is in compliance with its federal obligations with regard to Disclosure of Ownership and Control, Managing Employees Database Exclusion, and Checks, and Criminal Convictions Checks, and all other federal requirements related to Provider Screening and Enrollment.



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104 Continuity of Operations and Recovery Plan Page 1 of 3

104 CONTINUITY OF OPERATIONS AND RECOVERY/EMERGENCY PREPAREDNESS PLAN

EFFECTIVE DATE: April 2, 2018

REFERENCES: 42 CFR 483.475, 28 CFR 0.85, 22 U.S.C 38 § 2656f (d)(2), ACOM 104, uslegal.com, fema.gov, dema.az.gov, cms.gov, and ready.gov

This policy outlines the Continuity of Operations and Recovery Plan, for the Division of Developmental Disabilities (DDD), including the Continuity of Operations and Recovery Plan/Emergency Preparedness Plan for the Division’s Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICFs/IID), in conformance with CMS Final Rule 42 CFR 483.475, “Medicare and Medicaid Programs, Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers;” and in conformance with ACOM 104.

The Division must be able to recover from any disruption in business operations as quickly as possible. This recovery can be accomplished by the activation of a Continuity of Operations and Recovery Plan that contains strategies for recovery. The Continuity of Operations and Recovery Plan is part of the federal government’s Continuity of Operations Programs (COOP) requirements and the AHCCCS Contractor Operations Manual.

Division Responsibilities

The Division’s Continuity of Operations and Recovery Plan assures AHCCCS that the provision of covered services will occur as stated in its contract [42 CFR 438.207 and 42 CFR 438.208]; and as stated in the CMS Emergency Preparedness requirements [42 CFR 483.475] for ICFs/IID. This policy outlines the policy and procedures requirement for 42 CFR 483.475 in conjunction with ACOM 104.

42 CFR 483.475 requires the following four elements in the ICF/IID Continuity of Operations and Recovery/Emergency Preparedness Plan.

• Risk Assessment and Planning – identifying potential risks to the entity using an “all hazards” approach

• Policies and Procedures – reflective of the risk assessment and to include training and testing procedures

• Communication Plan – communication within the entity and across local community health care providers, in conjunction with state and local public health departments

• Training and Testing – to be conducted annually for all staff

Continuity of Operations and Recovery Plan

A. The Division:

1. Reviews, tests, and updates the plan at least annually, to manage unexpected events and the threat of such occurrences, which may negatively and significantly impact business operations and the ability to deliver services to members

2. Ensures that all staff are trained at least annually and are familiar with the Plan and understand their respective roles



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3. Designates a Continuity of Operations and Recovery Coordinator and furnishes AHCCCS with contact information as part of the Plan

4. Requires ICFs/IID to develop and maintain an Emergency Preparedness/Continuity of Operations and Recovery Plan

5. Maintains policies and procedures, as required by the Centers for Medicare and Medicaid Services (CMS), that address:

a. The provision of subsistence needs for staff and members (food, water, medical and pharmaceutical supplies)

b. Temperatures to protect client health and safety; emergency lighting; fire detection/extinguishing/alarms

c. Sewage and waste disposal

d. Tracking of members and staff during an emergency

e. Evacuation and sheltering in place

f. Availability of medical documentation

g. The use of volunteers in an emergency

h. Arrangements with other ICFs/IID and providers to receive members

i. Other mitigation and response strategies as applicable

B. The Plan:

1. References local resources

2. Identifies:

a. Key member priorities

b. Key factors that could cause disruption

c. Any additional priorities identified as critical, including communication systems (e.g., telephone, website, and email), providers’ receipt of prior authorization approvals and denials, members receiving transportation, and timely claims payments

3. Contains:

a. Specific timelines for resumption of services as well as the percentage of recovery at certain hours, and the key actions required meeting those timelines

b. Planning and training for:

i. Electronic/telephonic failure

Division of Developmental Disabilities Operations Manual



ii. Complete loss of use of the main site location and any satellite offices inand out of state

iii. Loss of primary computer system/records

iv. Extreme weather conditions

v. Communication during a business disruption. (The name and phonenumber of a specific contact in the Division of Health Care Management,and AHCCCS Security at 602-417-4888 if disruption occurs outside ofnormal business hours.)

vi. Other mitigation and response strategies as applicable

c. Documented periodic testing and training at least annually

Resources

For more information on Continuity of Operations Planning and Emergency Preparedness, visit the websites of the following organizations:

• Federal Emergency Management Agency (FEMA) – fema.gov

• Arizona Department of Emergency and Military Affairs – dema.az.gov

• Centers for Medicare and Medicaid Services (CMS) – cms.gov

• Ready.gov.



108 SECURITY RULE COMPLIANCE

EFFECTIVE D ATE: April 29, 2020 REFERENCES: 42 CFR 4 38.100(d) a nd 42 CFR 4 38.208(b)(4); 45 CFR P arts 160, 162, and 164; Section F3, Contractor Chart of Deliverables

This policy applies to the Division Developmental Disabilities (The Division).

Definitions

A. Breach - An impermissible use or disclosure of protected health information is presumed to be a breach unless the covered entity or business associate, as applicable, demonstrates that there is a low probability that the protected health information has been compromised. As stated in Section 13402 of the Health Information Technology for Economic and Clinical Health (HITECH) Act issued in August 2009.

B. Health Insurance, Portability, and Accountability Act ( HIPAA) - The H ealth Insurance Portability and Accountability Act; also known as the Kennedy-Kassebaum Act, signed August 21, 1996 as amended and as reflected in the implementing regulations at 45 CFR Parts 160, 162, and 164.

C. HIPAA Privacy Rule - The HIPAA Privacy Rule establishes national standards to protect in dividuals' medical records and other individual health information and applies to health plans, health care clearinghouses, and those health care providers that conduct certain health care transactions electronically. The Rule requires appropriate safeguards to protect the privacy of individual health information and sets limits and conditions on the uses and disclosures that may be made of such information without patient authorization. The Rule also gives patients’ rights over their health information, including rights to examine and obtain a copy of their health records and to request corrections.

D. HIPAA Security Rule - Established national standards to protect individuals’ electronic personal health information that is created, received, used, or maintained by a covered entity. The Security Rule requires appropriate administrative, physical and technical safeguards to ensure the confidentiality, integrity and security of electronic protected health information.

E. Health Information Technology for Economic and Clinical Health Act (HITECH) -

The H ealth Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009, was signed into law on February 17, 2009, to promote the adoption and meaningful use of health information technology. Subtitle D of the HITECH Act addresses the privacy and security concerns associated with the electronic transmission of health information, in part, through several provisions that strengthen the civil and criminal enforcement of the HIPAA rules.

F. Protected Health Information – Individually identifiable health information as described in 45 CFR 16 0.103(5) a bout a n individual that is transmitted or maintained in any medium where the information is:

108 Security Rule Compliance Page 1 of 5

http://www.hhs.gov/ocr/privacy/



• Created or received by a health care provider, health plan, employer, or health care clearinghouse.

• Relates to the past, present or f uture physical or mental health condition of an individual, provision of health care to an individual, or payment for the provision of health care to an individual.

Protected health information excludes information:

• In education records covered by the Family Educational Rights and Privacy Act as amended, 20 U.S.C. 1232g

• In records described at 20 USC 1232g(a)(4)(B)(IV)

• In employment records held by a covered entity in its role as an employer

• Regarding a person who has been deceased for more than 50 years.

G. Information Technology (IT) Risk Analysis - The assessment of the risks and vulnerabilities that could negatively impact the confidentiality, integrity, and availability of the electronic protected health information held by a covered entity, and the likelihood of occurrence.

H. Information Technology (IT) Risk Management - The actual implementation of security measures to sufficiently reduce an organization’s risk of losing or compromising its electronic protected health information and meeting the general security standards.

Data Security Audit

The Division must develop policies and procedures to ensure the privacy of protected health information, the security of electronic protected health information, and breach notification to members [42 CFR 4 38.100(d) a nd 42 CFR 43 8.208(b)(4)].

The Division must have a security audit performed by an independent third-party annually. If the Division performs in multiple AHCCCS lines of business, one comprehensive audit may be performed covering all systems for all lines of business or separate audits may be performed.

The audit must include, at a minimum, a review of the following:

1. Compliance with all security requirements as outlined in ACOM Policy 108, Attachment A, AHCCCS Security Rule Compliance Summary Checklist.

2. The Division policies and procedures to verify that appropriate security requirements have been adequately incorporated into the Division’s business practices, and the production processing systems. The Division’s policies and procedures must include the requirements for the Breach Notification Rule.




Audits performed in the second and subsequent years of the contract will focus primarily on remediation of prior findings and system and policy changes identified since the prior audit.

AHCCCS Security Compliance Report

The Division must submit the AHCCCS Security Rule Compliance Report to AHCCCS annually as described in Section F3, Contractor Chart of Deliverables, by uploading the report to a secure AHCCCS Share Point site. The timeframe audited may be calendar year, fiscal year, or contract year and must be noted in the report. The report must include all findings detailing any issues and discrepancies between the AHCCCS Security Audit Checklist requirements and the Division’s policies, practices and systems, and as necessary, a corrective action plan. In addition, the report must include written decisions regarding all addressable specifications.

The Division will verify that the required audit has been completed and the approved corrective action plan is in place and implemented as part of Operational Reviews.

The Division does not intend to release detailed audit reviews; however may, at its discretion, release a summary level of results.

AHCCCS Security Rule Compliance Checklist

A. Instructions

The AHCCCS Security Rule Compliance Checklist, located in the AHCCCS Operations Manual, identifies security rule requirements for administrative, physical, and technical safeguards. The Compliance Checklist must be signed and dated by the Chief Executive Officer or his/her designee verifying the information and must be submitted with the annual report.

B. Implementation Specifications

1. Required Specifications

If an implementation specification is identified as “required” (indicated with an “R” on the checklist), the specification must be implemented.

Addressable Specification: The concept of "addressable implementation specifications” was developed to provide covered entities additional flexibility with respect t o compliance with the security standards. Addressable implementation specifications are indicated with an “A” o n the checklist.

In meeting standards that contain addressable implementation specifications, a covered entity must do one of the following for each addressable specification:

a. Implement the addressable implementation specifications.

b. Implement one or more alternative security measures to accomplish the same purpose.




c. Not implement either an addressable implementation specification or an alternative.

The covered entity must decide whether a given addressable implementation specification is a reasonable and appropriate security measure to apply within its particular security framework. For example, a covered entity must implement an addressable implementation specification if it is reasonable and appropriate to do so, and must implement an equivalent alternative if the addressable implementation specification is unreasonable and inappropriate, and there i s a reasonable and appropriate alternative. This decision will depend on a variety of factors, such as, among others, the entity's risk analysis, risk mitigation strategy, what security measures are already in place, and the cost of implementation.

The decisions that a covered entity makes regarding addressable specifications must be documented in writing. The written documentation should include the factors considered as well as the results of the risk assessment on which the decision was based.

2. IT Risk Analysis

The required implementation specification at 45 CFR 16 4.308(a)(1)(ii)(A), for Risk Analysis, requires a covered entity to, “conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information held by the covered entity.”

IT Risk analysis is the assessment o f the risks and vulnerabilities that c ould negatively impact t he confidentiality, integrity, and availability of the electronic PHI held by a covered entity and th e likelihood of occurrence. The risk analysis may include taking inventory of all systems and applications that are used to access and house data and classifying them by level of risk. A thorough and accurate risk analysis would consider all relevant losses that would be expected if the security measures were not in place, including loss or damage of data, corrupted data systems, and anticipated ramifications of such losses or damage.

3. IT Risk Management

The required implementation specification at 45 CFR 16 4.308(a)(1)(ii)(B), for IT Risk Management, requires a covered entity to “implement security measures sufficient t o reduce risks and vulnerabilities to a reasonable and appropriate level to comply with 45 CFR. 164.306(a) [(the General Requirements of the Security Rule)].” IT Risk management is the actual implementation of security measures to sufficiently reduce an organization’s risk of losing or compromising its electronic P HI and to meet the general security standards.

4. Compliance Status




If the covered entity complies with the requirement, insert a “C” in the column. If the requirement is not met, insert “NC” for non-compliant.

5. Compliance Documentation

List policies, procedures, and processes used to determine compliance with the Implementation Specification.




109 Institution For Mental Disease 15 Day Limit Page 1 of 1

109 INSTITUTION FOR MENTAL DISEASE 15 DAY LIMIT

REVISION DATE: 3/26/2020 EFFECTIVE DATE: March 25, 2020 REFERENCES: 42 CFR 435.1010, 42 CFR 438.3(e)(2)(i) through (iii), 42 CFR 438.6(e)

This policy establishes processes and the Division’s requirements for compliance with managed care regulation 42 CFR 438.6(e), “Payments to MCOs or Prepaid Inpatient Health Plans (PIHPs) for enrollees that are a patient in an institution for mental disease.”

The Division contracts with Administrative Services Subcontractors (AdSS) and delegates responsibility for providing certain services in a manner that is compliant with law, its contract, and Division policy. See AdSS Operations Manual (same policy number and name as stated above) for the Division policy governing AdSS responsibilities regarding this topic.



Administration

110 Mental Health Parity Page 1 of 1

110 MENTAL HEALTH PARITY

EFFECTIVE DATE: October 1, 2019

The Division contracts with Administrative Services Subcontractors (AdSS) and delegates responsibility for providing certain services in a manner that is compliant with law, its contract, and Division policy. See AdSS Operations Manual 110, Mental Health Parity for the Division policy governing AdSS responsibilities regarding this topic.


Operational Policy Manual Chapter 203

Claims

203 Claims Processing Page 1 of 4

203 CLAIMS PROCESSING

REVISION: 10/01/2019 EFFECTIVE DATE: May 13, 2016 REFERENCES: A.R.S. §36-2903.01. G This Policy outlines the requirements for the adjudication and payment of claims for the Division of Developmental Disabilities (the Division).

Definitions

A. Receipt Date - The receipt date of the claim is the date stamp on the claim, or the date electronically received. The receipt date is the day the claim is received at the Division’s specified claim mailing address, received through direct electronic submission to the Division, or received by the Division’s designated Clearinghouse.

B. Clean Claim - A clean claim is a claim that may be processed without obtaining additional information from the provider of service or from a third party but does not include claims under investigation for fraud or abuse or claims under review for medical necessity.

C. Claim Submission Timeliness - Unless a contract specifies otherwise, the Division ensures that, for each form type (Dental/Professional/Institutional), 95% of all clean claims are adjudicated within 30 days of receipt of the clean claim and 99% are adjudicated within 60 days of receipt of the clean claim.

General Claims Processing Information

The Division develops and maintains claims processes and systems that ensure the accurate collection and processing of claims, analysis, integration, and reporting of data. These processes and systems result in the provision of information on areas including, but not limited to, service utilization, claim disputes, member grievances and appeals, and disenrollment for reasons other than loss of Medicaid eligibility.

The Division ensures there is a mechanism, such as the Division website or other provider platforms, to inform providers of the appropriate place to send claims at the time of notification or prior authorization if the provider has not otherwise been informed of such information via subcontract and/or a provider manual.

The Division follows all general claims processing requirements as described below.

A. The Division uses nationally recognized methodologies to correctly pay claims; these methodologies include but not limited to:

1. Medicaid National Correct Coding Initiative (NCCI) for Professional, Ambulatory Surgery Centers and Outpatient services

2. Multiple Procedure/Surgical Reductions

3. Global Day E & M Bundling standards

B. The Division’s claims payment system assesses and/or applies data-related edits, including but not limited to:

1. Benefit Package Variations



Claims


2. Timeliness Standards

3. Data Accuracy

4. Adherence to Arizona Health Care Cost Containment System (AHCCCS) Policy

5. Provider Qualifications

6. Member Eligibility and Enrollment

7. Over-Utilization Standards

C. If a claim dispute is overturned, in full or in part, the Division reprocesses and pays the claim(s) in a manner consistent with the decision within 15 business days of the decision.

D. The Division’s claims payment system does not require a recoupment of a previously paid amount when the provider’s claim is adjusted for data correction (excluding payment to a wrong provider) or an additional payment is made. The Division ensures encounters are submitted in accordance with AHCCCS’ standards and thresholds.

E. The Division adheres to the following:

1. Coordination of Benefits and Third Party Liability requirements per the AHCCCS Contract, ACOM Policies 201 and 434,

2. Claims Reprocessing requirements per the AHCCCS Contract, ACOM Policy 412, and the AHCCCS Claims Dashboard Reporting Guide,

3. All Health Insurance, Portability, and Accountability Act (HIPAA) requirements according to 45 CFR Parts 160, 162, and 164.

F. When the Division cost avoids a claim, the following payment provisions apply:

1. Claims from Providers contracted with the Division: The Division pays the difference between the Contracted Rate and the Primary Insurance Paid amount, not to exceed the Division’s Contracted rate.

2. Claims from Providers not contracted with the Division: The Division will pay the difference between the AHCCCS Capped-Fee-For-Service rate and the Primary Insurance Paid amount, not to exceed the AHCCCS Capped-Fee-For Claims Processing by Administrative Services Subcontractors (AdSS) Contractors.

The Division Responsibilities

A. Discounts

The Division applies a quick pay discount of 1% on hospital claims paid within 30 days of the date on which the clean claim was received (A.R.S. §36-2903.01.G). Quick pay discounts are applied to any acute hospital inpatient, outpatient, and freestanding emergency department claims billed on a UB-04 claim form.



Claims


B. Interest Payments

The Division pays interest on late payments and reports the interest as required.

1. For hospital clean claims, the Division pays slow payment penalties (interest) on payments made after 60 days of receipt of the clean claim. Interest is paid at the rate of 1% per month for each month or portion of a month from the 61st day until the date of payment. Slow pay penalties (interest) are applied to any acute hospital inpatient, outpatient, and freestanding emergency department claims billed on a UB-04 claim form.

2. A claim for authorized services submitted by a licensed skilled nursing facility, an assisted living ALTCS provider, or a home and community based ALTCS provider shall be adjudicated within 30 calendar days after receipt by the Division. The Division pays interest on payments made after 30 days of receipt of the clean claim. Interest is paid at the rate of 1% per month (prorated on a daily basis) from the date the clean claim is received until the date of payment.

3. For non-hospital clean claims, the Division pays interest on payments made after 45 days of receipt of the clean claim. Interest is paid at the rate of 10% per annum (prorated daily) from the 46th day until the date of payment.

4. The Division pays interest on all claim disputes as appropriate based on the date of the receipt of the original clean claim submission (not the claim dispute).

C. Electronic Processing and Remittance Advices

The Division accepts and generates required HIPAA-compliant electronic transactions from or to any provider or their assigned representative interested in and capable of electronic submission.

1. Accepted electronic submissions include eligibility verifications, claims, claims status verifications, and prior authorization requests.

2. The Division makes claim payments via electronic funds transfer and accepts electronic claim attachments.

3. The Division generates an electronic remittance that includes:

a. The reason(s) for denials and adjustments

b. A detailed explanation/description of all denials, payments and adjustments

c. The amount billed

d. The amount paid

e. Application of Coordination of Benefits (COB) and copays

f. Providers rights for claim disputes

Note: The Division includes instructions and timeframes for the submission of claim disputes and corrected claims on its remittance advice.



Claims


4. The Division sends the remittance advice with the payment, unless the payment is made by Electronic Funds Transfer (EFT). Any remittance advice related to an EFT is sent no later than the date of the EFT.

Claim Timely Filing

Per ARS 36-2904, Section G, the Division will not pay:

A. Claims initially submitted more than six months after date of service for which payment is claimed or after the date that eligibility is posted, whichever date is later.

B. Claims submitted as clean claims more than 12 months after date of service for which payment is claimed or after the date that eligibility is posted, whichever date is later.

AdSS Claims Processing

The Division contracts with health plans and delegates the processing of medical claims. Refer to the AdSS Operations Manual, 203 Claims Processing policy for further details.


Chapter 200 Claims

Ground Ambulance Transportation Reimbursement Requirements for Non-Contracted Providers

Page 1 of 4

205 GROUND AMBULANCE TRANSPORTATION REIMBURSEMENT REQUIREMENTS FOR NON-CONTRACTED PROVIDERS

EFFECTIVE DATE: 11/6/2019 REFERENCES: 42 CFR 414.605, A.R.S. §36-2201, 9 A.A.C. 22, Article 211, A.A.C. R9-25-101(18), 42 CFR 438.114(a), A.R.S. §36-2202, A.R.S. §36-2204, and A.R.S. §36-2212, 9 A.A.C. 22, A.R.S. § 36-2239(H), and AMPM Policy 310-BB.

Purpose To provide ground ambulance transportation reimbursement requirements. It is limited to the Division of Developmental Disabilities (the Division) and ambulance or emergent care transportation providers when a contract does not exist between these entities.

Definitions

A. Advanced Life Support (ALS) - 42 CFR 414.605, describes ALS, level 1 (ALS1) astransportation by ground ambulance vehicle, medically necessary supplies andservices, either an ALS assessment by ALS personnel or provision of at least one ALSintervention. Advanced life support, level 2 (ALS2) means either transportation byground ambulance vehicle, medically necessary supplies and services, and theadministration of at least three medications by intravenous push/bolus or bycontinuous infusion, excluding crystalloid, hypotonic, isotonic, and hypertonicsolutions (Dextrose, Normal Saline, Ringer's Lactate); or transportation, medicallynecessary supplies and services, and the provision of at least one of the followingALS procedures:

• Manual defibrillation/cardioversion,

• Endotracheal intubation,

• Central venous line,

• Cardiac pacing,

• Chest decompression,

• Surgical airway, or

• Intraosseous line.

B. Ambulance - Ambulance as defined in A.R.S. §36-2201.

C. Basic Life Support (BLS) - 42 CFR 414.605, describes BLS as transportation byground ambulance vehicle that has medically necessary supplies and services, plusthe provision of BLS ambulance services. The ambulance must be staffed by atleast two people who meet the requirements of state and local laws where theservices are being furnished. Also, at least one of the staff members must becertified, at a minimum, as an emergency medical technician-basic (EMT-Basic) bythe State of local authority where the services are furnished and be legallyauthorized to operation all lifesaving and life-sustaining equipment on board thevehicle.


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Page 2 of 4

D. Emergency Ambulance Services - Emergency ambulance services are as described in 9 A.A.C. 22, Article 211.

E. Emergency Ambulance Transportation - Ground or air ambulance services that are medically necessary to manage an emergency physical or behavioral health condition and which provide transport to the nearest appropriate facility capable of treating the DDD member’s condition.

F. Emergency Medical Care Technician (EMCT) - As defined in A.A.C. R9-25-101(18).

G. Emergency Medical Condition - A medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in: a) placing the patient’s health (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy, b) serious impairment to bodily functions, or c) serious dysfunction of any bodily organ or part [42 CFR 438.114(a)].

H. Emergency Medical Services - Covered inpatient and outpatient services provided after the sudden onset of an emergency medical condition as defined above. These services must be furnished by a qualified provider and must be necessary to evaluate or stabilize the emergency medical condition [42 CFR 438.114(a)].

Policy

Ambulance providers that have fees established by the Arizona Department of Health Services (ADHS) are reimbursed by the Division at a percentage, prescribed by law, of the Ambulance provider’s ADHS-approved fees for covered services. These rates are contained in the AHCCCS Capped Fee for Service (FFS) Fee Schedule for Certificate of Necessity Providers and will be used by the Division for reimbursement when no contract exists with the provider.

For Ambulance providers, whose fees are not established by ADHS, and no contract exists with the provider, the AHCCCS Capped FFS Fee Schedule is for Ground Transportation will be used by the Division.

Emergency Ground Ambulance Claims are Subject to Medical Review

Claims are submitted with documentation of medical necessity and a copy of the trip report, with the following information:

A. Medical condition, signs, symptoms, procedures, and treatment.

B. Transportation origin, destination, and mileage (statute miles).

C. Supplies.

D. Necessity of attendant, if applicable.

E. Name and DHS numbers of the attendants providing care along with the signature of the trip report author.


Chapter 200 Claims


Page 3 of 4

Claims submitted without such documentation are subject to denial. The Division will process the claims within the timeframes established in 9 A.A.C. 22, Article 7. Emergency transportation ordered by the Division cannot be denied upon receipt. This claim is not subject to further medical review.

Criteria and Reimbursement Processes for Advanced Life Support (ALS) and Basic Life Support

A. Advanced Life Support (ALS) level

1. In order for Ambulance services to be reimbursable at the ALS level, all of the following criteria shall be satisfied:

a. The Ambulance shall be ALS licensed and certified in accordance with A.R.S. §36-2202, A.R.S. §36-2204, and A.R.S. §36-2212,

b. Emergency Medical Care Technician (EMCT) are present and EMCT services/procedures are medically necessary, based upon the member’s symptoms and medical condition at the time of the transport, and

c. EMCT services/procedures and authorized treatment activities were provided.

B. Basic Life Support (BLS) level

1. In order for Ambulance services to be reimbursable at the BLS level, the following requirements will be met:

a. The Ambulance must be BLS licensed and certified in accordance with A.R.S. §36-2212 and A.A.C. R9-25-201.

b. EMCT are present

c. EMCT services/procedures, are medically necessary, based upon the member’s symptoms and medical condition at the time of the transport.

d. EMCT services/procedures and authorized treatment activities were provided.

Claims submitted without such documentation are subject to denial. The Division processes the claims within the timeframes established in 9 A.A.C. 22, Article 7. Emergency transportation ordered by the Division cannot be denied upon receipt. This claim is not subject to further medical review.

Non-Emergent Ground Ambulance Transportation Payment Provisions

A. Non-emergent Ambulance transportation is subject to review for medical necessity by the Division. Medical necessity criteria is based upon the medical condition of the member. Non- emergent transportation by Ambulance is appropriate if:

1. Documentation supports that other methods of transportation are


Chapter 200 Claims


Page 4 of 4

contraindicated.

2. The member’s medical condition, regardless of bed confinement, requires the medical treatment provided by the qualified staff in an Ambulance.

Non-emergent transportation ordered by the Division cannot be denied upon receipt. This claim is not subject to further medical review.

B. At the Division’s discretion, non-emergent Ambulance transport may not require prior authorization or notification. This may include after-hours calls. An example is an Ambulance company which receives a call from the emergency room to transport a nursing facility member back to the facility and the Division cannot be reached.

All hospital-to-hospital transfers are paid at the BLS level unless the transfer meets ALS criteria. This includes transportation between general and specialty hospitals.

C. Transportation reimbursement is adjusted to the level of the appropriate alternative transportation when circumstances do not necessitate an Ambulance transport, or the services rendered at the time of transport are deemed not medically necessary. Ambulance providers that have fees established by ADHS are reimbursed in accordance with A.R.S. § 36-2239(H).

Refer to AMPM Policy 310-BB for additional requirements for coverage of transportation.


Chapter 300 Finance

302 Prior Period Coverage Reconciliation: Administrative Services Subcontractors Page 1 of 4

302 PRIOR PERIOD COVERAGE RECONCILIATION: ADMINISTRATIVE SERVICES SUBCONTRACTORS

EFFECTIVE DATE: October 1, 2018 REFERENCES: A.R.S. § 36-2905 and § 36-2944.01; A.A.C. R9-22-101; Patient Protection and Affordable Care Act, Section 9010; ACOM 412

Due to the uncertainty regarding actual utilization and medical cost experience during the Prior Period Coverage (PPC) period, the Division intends to limit the financial risk to its Administrative Services Subcontractors (ADSS). The PPC Reconciliation applies to dates of service effective in Contract Year Ending (CYE) 19 and Forward, and is based upon prior period expenses and prior period net capitation as described in this policy. The Division will recoup/reimburse a percentage of the AdSS’s profit or loss for all risk groups as described below. All profit/loss sharing is based on adjudicated encounter data and subcapitated/block purchase expense reports. This reconciliation is performed annually on a contract year basis, which is October 1 to September 30.

Definitions

A. Access to Professional Service Initiative (APSI) - Effective October 1, 2018, theDivision seeks to provide enhanced support to certain professionals in order to (1)preserve and enhance access to these professionals who deliver essential services tomembers and (2) support professionals who are critical to professional training andeducation efforts. APSI is a program to preserve and promote access to medicalservices through a uniform percentage increase to the AdSS’s rates for professionalservices provided by qualified physicians and non-physician professionals affiliated withdesignated hospitals who meet the definition outlined in ACOM Policy 325.

B. Administrative Component - The administrative component is equal to theadministrative Per Member Per Month (PMPM) built into the rates multiplied by theactual PPC member months for the contract year being reconciled.

C. Health Insurer Fee Capitation Adjustment - An amount equal to the capitationadjustment for the year being reconciled that accounts for the Contractor’s liability forthe excise tax imposed by section 9010 of the Patient Protection and Affordable CareAct and the premium tax and any other state or federal taxes associated with thatportion of the capitation rate.

D. Prior Period Coverage (PPC) - The period of time prior to the member’s enrollment,during which a member is eligible for covered services. The timeframe is from theeffective date of eligibility until the date the member is enrolled with an AdSS. Refer toA.A.C. R9-22-101. If a member made eligible via the Hospital Presumptive Eligibility(HPE) program is subsequently determined eligible for the Division via the fullapplication process, prior period coverage for the member will be covered by AHCCCSFee-For-Service (FFS) and the member will be enrolled with the Contractor only on aprospective basis. The time period for prior period coverage does not include the timeperiod for prior quarter coverage.

E. PPC Capitation - Capitation payment for the period of time from the first day of the


Chapter 300 Finance


month of application or the first eligible month, whichever is later, to the day a member is enrolled with the Contractor.

F. PPC Medical Expense - Total expenses covered under the contract for services providedduring the PPC time period, which are reported through fully adjudicatedencounters. This will exclude APSI expenses.

G. PPC Net Capitation - PPC capitation less the administrative component, the healthinsurer fee capitation adjustment, APSI capitation and the premium tax component.

H. PPC Reconciliation Risk Groups - Populations subject to this reconciliation include allPPC risk groups except State Only Transplants and Adult Group above 106% FPL(Adults > 106%) (formerly known as Newly Eligible Adults or NEAD) (Acute CareContractors Only).

I. Premium Tax - The premium tax is equal to the tax imposed pursuant to A.R.S. § 36-2905 and §36-2944.01 for all payments made to AdSSs for the Contract Year.

Policy

A. General

1. The reconciliation must relate solely to fully adjudicated PPC medical expensefor all PPC reconciliation risk groups. The enhanced portion of a payment forPrimary Care Enhanced Payment (PCP Parity) that is subject to AHCCCS costsettlement will not be included in the reconciliation, the non-enhancedportion of the payment will be included in the reconciliation. The enhancedportion of a payment for APSI that is subject to a unique reconciliation asoutlined in ACOM Policy 325 will also be excluded from this reconciliation.

2. The reconciliation will limit the AdSS’s profits and losses to 2% of the AdSS’sPPC net capitation for all PPC reconciliation risk groups combined (SeeAttachment A for calculation). Any losses in excess of 2% will be reimbursedto the AdSS, and likewise, profits in excess of 4% will be recouped. The fullPPC period is eligible for this reconciliation.

B. Division Responsibilities

1. No less than six months after the contract year to be reconciled, the Divisionwill perform an initial reconciliation. The reconciliation will be calculated asfollows:

PPC Net Capitation

Less: PPC Medical Expense

Equals: Profit/Loss to be reconciled adjusted for PCP Parity

The Division may incorporate completion factors in the initial reconciliation basedon internal data available at the time of the reconciliation.


Chapter 300 Finance


PPC capitation and medical expense to be included in the reconciliation are based on the date of service for the contract year being reconciled.

2. The Division will compare fully adjudicated encounter information to financialstatements and other AdSS submitted files for reasonableness.

3. The Division will provide the AdSS with the data used for the initialreconciliation and provide a set time period for review and comment by theAdSS. Upon completion of the review period, the Division will evaluate AdSScomments and make any adjustments to the data or reconciliation aswarranted. The Division may then process partial distributions/recoupmentsthrough a future monthly capitation payment.

4. A second and final reconciliation will be performed no less than 12 monthsafter the end of the contract year to be reconciled. This will allow forcompletion of the claims lag and encounter reporting. The Division will providethe AdSS with the data used for the final reconciliation and provide a set timeperiod for review and comment by the AdSS. Upon completion of the reviewperiod, the Division will evaluate AdSS comments and make any adjustmentsto the data or reconciliation as warranted.

5. Any amount due to or due from the AdSS as a result of the final reconciliationthat was not distributed or recouped as part of the initial reconciliation will bepaid or recouped through a future monthly capitation payment.

C. AdSS Responsibilities

1. The AdSS must submit encounters for PPC medical expense and thoseencounters must reach a fully adjudicated status by the required due dates.The Division will only use fully adjudicated encounters reported by the AdSSto determine the medical expenses used in the reconciliation.

2. The AdSS must maintain financial statements that separately identify all PPCtransactions, and must submit such statements as required by contract and inthe format specified in the AHCCCS Financial Reporting Guide.

3. The AdSS must monitor the estimated PPC reconciliation receivable/payableand record appropriate accruals on financial statements submitted to theDivision on a quarterly basis.

4. It is the AdSS’s responsibility to identify to the Division any encounter dataissues or necessary adjustments by the initial reconciliation due date. It isalso the responsibility of the AdSS to correct (including adjudication ofcorrected encounters) any identified encounter data issues no later than 12months after the end of the contract year being reconciled. Reconciliationdata issues identified that are the result of an error by the Division will becorrected prior to the final reconciliation.

5. The AdSS must submit any additional data as requested by the Division forreconciliation purposes (e.g. encounter detail file).


Chapter 300 Finance


6. If the AdSS performs recoupments/refunds/recoveries on PPC claims, therelated encounters must be adjusted (voided or void/replaced) pursuant toACOM Policy 412. The Division reserves the right to adjust any previouslyissued reconciliation results for the impact of the revised encounters andrecoup any amounts due to the Division. If the AdSS does not submit therevised encounters within the required timeframe, the Division may recoupthe estimated impact on the reconciliation and reserves the right to sanctionthe AdSS.



305 Performance Bond and Equity Per Member Requirements Page 1 of 1

305 PERFORMANCE BOND AND EQUITY PER MEMBER REQUIREMENTS

EFFECTIVE DATE: October 1, 2019 REFERENCES: A.R.S. § 35-155

The Division contracts with Administrative Services Subcontractors (AdSS) and delegate’s responsibility for providing certain services in a manner that is compliant with law, its contract, and Division policy. See AdSS Operations Manual (same policy number and name as stated above) for the Division policy governing AdSS responsibilities regarding this topic.



314 Auto-Assignment Algorithm Page 1 of 1

314 AUTO-ASSIGNMENT ALGORITHM

EFFECTIVE DATE: October 1, 2019

This policy describes the method used to auto-assign members to an Administrative Services Subcontractor (AdSS) and the assignment of available models.

A. Prior to auto-assignment to an AdSS, assignment to a model must be completed.

1. Regarding Annual Enrollment Choice, members who are newly eligible for theDivision and ALTCS, and members already enrolled in a plan, may select anavailable model prior to the start of a new contract.

2. If the member does not select an available model, the Division will assign toModel A.

B. Upon award of a new contract, the Division will auto-assign members as follows:

1. Prior to the start of the contract (choice period), the Division gives current membersa choice to select from the newly awarded AdSS contractors.

2. If a member does not select an AdSS during the choice period and themember’s current AdSS is awarded a contract, the Division assigns the memberto the same AdSS.

3. If a member does not select an AdSS during the choice period and the member’scurrent AdSS is NOT awarded a contract, the Division reassigns the member to oneof the newly contracted AdSS.

4. Auto-assignment to a newly contracted AdSS will continue until the number ofmembers assigned to the newly contracted AdSS reaches 50% of the number ofmembers assigned to the AdSS that continued to contract.

5. If all AdSS are new, the Division gives the members a choice to select an AdSS priorto the start of the contract.

C. Ongoing, the Division will auto assign to the available AdSS in a revolving sequence.The Division may change the auto assignment process at any time during the term ofthe contract in response to AdSS-specific issues (e.g., imposition of an enrollmentcap), when in the best interest of the ALTCS Program and/or the state, or to recognizeand reward AdSS performance across a variety of factors of importance to the Division.



317 Change in Organizational Structure Page 1 of 5

317 CHANGE IN ORGANIZATIONAL STRUCTURE

REVISION DATE: 10/1/2018 EFFECTIVE DATE: May 13, 2016 REFERENCES: ACOM Policy 438, ACOM 439, ACOM 103; AHCCCS Contract Attachment F3, Contractor Chart of Deliverables, AHCCCS Contract Section D, Corporate Compliance; 42 CFR 106, 42 CFR Subpart B

Purpose

This policy identifies the requirements for submitting changes in the Division’s organizational structure resulting from an act of the Governor of the State of Arizona or the Arizona State Legislature or resulting from a planned change in a Management Service Agreement (MSA) Subcontractor. This policy also identifies the Division’s role in monitoring and evaluating changes in organizational structure, as defined below, for a Management Service Agreement subcontractor.

Definitions

A. Acquisition – an acquiring, by one company, of all of a target company’s assets,capital, or stock.

B. Administrative Services Subcontract - agreement that delegates any of therequirements of the contract with the Division, including, but not limited to thefollowing:

1. Claims processing, including pharmacy claims

2. Credentialing, including those requirements for only primary source verification

3. Management Service Agreements (MSAs)

4. Service Level Agreements with any division or subsidiary of a corporate parentowner.

Providers are not AdSS.

C. Articles of Incorporation - basic legal instrument required to be filed with the stateupon incorporation of a business (sometimes also referred to as the Certificate ofIncorporation or the Corporate Charter).

D. Change In Organizational Structure - any of the following:

1. Acquisition

2. Change in Articles of Incorporation

3. Change in ownership

4. Change of MSA subcontractor (to the extent management of all or substantiallyall plan functions has been delegated to meet Division contractualrequirements)



Financial


5. Joint venture

6. Merger

7. Reorganization

8. State agency reorganization resulting from an act of the Governor of the State of Arizona or the Arizona State Legislature

9. Other applicable changes that may cause a change in any of the following:

a. Employer Identification Number/Tax Identification Number (EIN/TIN)

b. Critical member information, including the website, member or provider handbook and member ID card

c. Legal entity name.

E. Change in Ownership - any change in the possession of equity in the capital, stock, profits, or voting rights, with respect to a business such that there is a change in the persons or entities having the controlling interest of an organization, such as changes that result from a merger or acquisition, or, with respect to non- stock corporations (e.g., non-profit corporations), a change in the members or sponsors of the corporation or in the voting rights of the members or sponsors of the corporation.

F. Joint Venture - business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture, each of the participants is responsible for profits, losses and costs associated with it. However, the venture is its own entity, separate and apart from the participants’ other business.

G. Management Service Agreement (MSA) - type of subcontract with an entity in which the entity’s management delegates all or substantially all management and administrative services necessary.

H. Merger - Two companies join together to form a single entity, using both companies’ assets or stock, or, for non-stock corporations (e.g., non-profit corporations), the conversion of memberships, sponsors or their voting rights. Both companies cease to exist separately and new stock is issued for the resulting organization or, for non-stock corporations (e.g., non-profit corporations), memberships or sponsors are combined or their voting rights are transferred to the new corporation.

I. Performance Bond - A cash deposit with the State Treasurer or a financial instrument secured by the AdSS in an amount designated by the Division to guarantee payment of AdSS claims.

J. Reorganization - An arrangement where a company attempts to restructure its business to ensure it can continue operations. A company restructuring may work with its creditors to restate its assets and liabilities which may be an attempt to avoid a bankruptcy.



Financial


Change in Organizational Structure

A change in organizational structure includes any of the following:

A. Acquisition

B. Change in Articles of Incorporation

C. Change in Ownership

D. Change of MSA Subcontractor

E. Joint Venture

F. Merger

G. Reorganization

H. Other applicable changes that may cause:

1. A change in the Employer Identification Number/Tax Identification Number (EIN/TIN)

2. Changes in critical member information, including the website, member or provider handbook, and member ID card, or

3. A change in legal entity name.

In addition, a change in organizational structure may require a contract amendment to the Division’s contract with AHCCCS. If the Division does not obtain prior approval, or AHCCCS determines that a change in the Division’s organizational structure is not in the best interest of the state, AHCCCS may terminate the contract. Similarly, a change in organizational structure may require a contract amendment to the AdSS contract with the Division. If the AdSS does not obtain prior approval, or the Division determines that a change in the AdSS organizational structure is not in the best interest of the state, the Divisiion may terminate the contract. The Division may offer open enrollment to the members assigned to the AdSS should a change in organizational structure occur. The Division will not permit one organization to own or manage more than one contract within the same line of business in the same Geographic Service Area (GSA).

Transition Plan

The Division submits a summary of all changes in organizational structure and a transition plan to AHCCCS 180 days prior to the effective date of the change.

Items in the transition plan, for which information is not yet available for submission, or is still considered draft, must be noted and submitted, or resubmitted, to AHCCCS no later than 90 days prior to the effective date.

As part of the transition plan, the Division will complete an assessment of the following:

A. Any potential interruption of services to members including steps to ensure there are no interruptions



Financial


B. The ability to maintain and support the contract requirements

C. Major functions of the Division, as well as Medicaid programs, are not adversely affected

D. The integrity of a fair, competitive procurement process for MSA Subcontractors.

Notification to AHCCCS

When notifying AHCCCS, the considerations listed above, and the following information is included in the summary:

A. Any material change to operations as specified in ACOM Policy 439 and AHCCCS Contract, Section D

B. The state or federal legislation, rule, or action that necessitates a change in Organizational Structure

C. A description of the following:

1. Any changes to the management and staffing of the organization currently overseeing services provided under the contract

2. Any changes to existing Management Services Subcontracts

3. Any changes to the administration of critical components of the organizations, information systems, prior authorization, claims processing, or grievances

4. The plan for communicating the change to members, including a draft notification to be distributed to affected members and providers

5. The planned changes to critical member information, including the website, member and provider handbook, and member ID card

6. Any anticipated changes to the network

7. Any changes in federal or state funding that directly impact the Medicaid line of business.

D. Upon AHCCCS approval of the transition plan, any additional information requested by AHCCCS will be submitted within 120 days of the change, as specified in Contract, Attachment F3, Contractor Chart of Deliverables.

The Division submits the following no later than 45 days prior to the effective date of the change in organizational structure and commencement of operations under the new structure, as specified in Contract, Attachment F3, Contractor Chart of Deliverables:

A. Information regarding the Disclosure of Ownership and Control

B. Disclosure of Information on Persons Convicted of a Crime in accordance with 42CFR 455, Subpart B, 42 CFR 455.436, State medicated Director Letters 08-003 and 09-001

C. AHCCCS Contract Section D, Corporate Compliance, and AHCCCS ACOM Policy 103




For a change of MSA Subcontractor, the Division follows the process for the review and approval of the new MSA Subcontractor as outlined in AHCCCS ACOM Policy 438.

Changes in Organizational Structure for an MSA Subcontractor

MSA Subcontractors that also have a contract with AHCCCS must notify the Division at the same time notification is given to AHCCCS. As appropriate, the Division must collaborate with AHCCCS in monitoring and evaluating the transition plan.

The Division evaluates and monitors the transition plan for MSA Subcontractors that do not have a contract with AHCCCS.



320 – HEALTH INSURER PROVIDER FEE

EFFECTIVE DATE: April 29, 2020

REFERENCES: A. R.S. § 36-2905, Section 9010 of the Patient Protection and Affordable Care Act; I RS Form 8963; AC OM Policy 320 Attachment A and Attachment B ; Section F3, Contractor Chart of Deliverables

The purpose o f this Policy is to define what the Division will submit to AHCCCS and the process by which AHCCCS will provide funding to the Division for the Health Insurance Provider Fee.

The Division contracts with Administrative Services Subcontractors (AdSS) and delegates responsibility excluding Indian Health Services, for providing c ertain services in a manner that i s compliant w ith law, its contract, and Division policy. See AdSS Operations Manual (Chapter